Alimentation Couche-Tard (B) (ATD.B.TO) Buy,…

Alimentation Couche-Tard (B) (ATD.B.TO)

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HOLD

They have headwinds from consumer staples names and will likely be in the penalty box for a while due to a recent acquisition attempt.

BUY

Some of the best capital allocators in Canada. Failed acquisition attempt in France made stock sell off, and those fears are still swirling. Ultimately, you have to give management the benefit of the doubt. Long-term, a reasonable investment as they execute on strategy. Still one of the best performing TSX stocks over the last decade.

BUY

Failed French acquisition. Still looking for acquisitions. Have to make bigger ones to move the needle. Until then, will grow organically, but slowly until economy opens up. Exceptionally cheap at 13x earnings. Technically oversold, so a good time to buy. He owns it in TFSAs.

DON'T BUY

It sold off hard when it was revealed they were looking at a potential merger in France. It suggested they were running out of runway for acquisitions. EV vehicles are starting to increase from 1 to 2%. Rumors of this area were a good reason to buy it, but he has hesitations on it beyond $45.

BUY ON WEAKNESS

Allan Tong’s Discover Picks The stock’s ATD.B five-year return stands at 34.46% and 25.75% at three years. However, in the past 12 months ATD stock has lagged the TSX, posting a -11.35% total return, -8.25% revenue growth YOY, and share performance around 11% YOY. Read 3 Dependable Canadian Stocks to Buy in 2021 for our full analysis.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There has not been a lot of specific announcements. The company is aware of the value of its locations for electric vehicles. It has a strong balance sheet and is looking for acquisitions. Unlock Premium - Try 5i Free

TOP PICK

Has long owned this. It recently dropped 10-15% when it announced it was taking over Carrefour in France (since failed). He added shares on that dip. ATD grows through acquisition, so why are investors surprised with the recent attempt? The big Carrefour attempt spooked people, but shouldn't have. Doesn't see this as a negative. (Analysts’ price target is $48.00)

DON'T BUY

He has stayed away because it was gasoline sales at low margins. The business is very well managed but investors are questioning strategies going forward after they took a run at a grocery chain in France.

BUY ON WEAKNESS

The French government has expressed its disagreement with ATD's acquisition of Carrefour. If they do business in France, they must abide by their strict labour laws. Does not think there will be a huge upside. Longer term, the stock's outlook is quite positive. The acquisition may not go through. Looking at the chart, there has been a sharp selloff so it is currently at a discount.

BUY ON WEAKNESS

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sell off today is probably over done. If the deal doesn’t go through, which is highly probable, the stock should bounce back. If it goes through, management has executed well in the past so it should be okay. Unlock Premium - Try 5i Free

BUY

US Democratic sweep. This matters because of the green deal and electrification. A third of profitability is derived from fuel, and this rattles some investors. These fears are overblown. It's a consolidator, profitable, upsells items on a higher margin. Buy it here, sleep well at night.

TOP PICK

Spread across Canada. Now looking at opportunities in Asia. Going to see continued expansion worldwide, which will help cut costs further. Yield is 0.80%. (Analysts’ price target is $52.47)

STRONG BUY

Neat thing is they have organic growth, which will continue, and growth by acquisition. They've acquired well, and integrated well. Increase value at the store, and a better logistics supply chain, so cashflow has increased. Lots of good growth internationally. Competitive in a changing world, especially with electrification. Great Canadian company. He'd buy here.

TOP PICK

Another exceptional company. Great Canadian success story. Tremendously undervalued at these levels. Yield is 0.78%. (Analysts’ price target is $52.33)

WEAK BUY

An excellent operator and excellent acquirer. There are so many other growth opportunities, though. They have 20% of profits from tobacco and she does not like that.

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Alimentation Couche-Tard (B) (ATD.B.TO)